Business this week

A court of arbitration in The Hague awarded some former shareholders of Yukos, a defunct Russian oil company, $50 billion in damages. The court found that the Russian government had acted illegally when it forced the firm into bankruptcy in 2006 before taking control of its assets through Rosneft, a state-run company. It also said that the prosecution in 2003 of Mikhail Khodorkovsky, once the majority shareholder in Yukos, was unlawful. Mr Khodorkovsky was jailed for tax evasion and fraud. Russia is likely to resist paying up. See article

The worsening relationship between Russia and Europe is bad news for BP, which owns a 20% stake in Rosneft. The British oil firm reported a second-quarter profit of $3.2 billion, up from $2.4 billion during the same period last year. However, it said that EU sanctions against Russia (over its actions in Ukraine), some of which target the oil sector, would hurt its business.

America’s GDP recovered impressively in the second quarter of 2014. The economy grew at an annual rate of 4% compared with a 2.1% contraction in the first quarter of the year. Spending by business was particularly strong; consumer spending also grew. Some 288,000 jobs were added to the economy in June.

Picking up a bargain

Two big American discount stores are to unite. Dollar Tree has agreed to buy Family DollarStores in a deal worth $8.5 billion. The combined firm, which will continue to operate two separate brands, will have over 13,000 stores and sales of $18 billion. Carl Icahn, an activist investor who has a stake in Family Dollar, had been pushing for the firm to find a buyer.

Brazil’s Central Bank announced measures to ease banks’ reserve requirements. A boost to lending would help Brazil’s sluggish economy, which is suffering from low growth and high inflation.

Virgin America filed for an initial public offering. The airline, which is partly owned by Sir Richard Branson’s Virgin Group, made its first profit in 2013—$10.1m on revenue of $1.42 billion. The carrier, which launched in 2007, did not declare the number of shares it would issue nor their price. However, it gave a placeholder target of raising $115m.

Horse trading

Reckitt Benckiser is to spin off RB Pharmaceuticals, the arm of the firm that makes Suboxone, a heroin substitute. The move could net Reckitt up to $3 billion. Sales of Suboxone have been hit by the production of generic versions of the drug. Reckitt will now concentrate on its core consumer-goods business.

China launched an antitrust investigation into Microsoft. It is the latest blow to the firm in the country, after the Chinese government said earlier this year that it would no longer run Windows 8 on its computers, citing security concerns.

China also began a separate investigation into Qualcomm, a big American wireless-technology firm, alleging it abused its monopoly power. Some think the country is using such probes as a means to protect local firms.

American regulators are investigating UBS and Deutsche Bank over their “dark pools”— private and anonymous trading rooms. Several bodies, including the Securities and Exchange Commission, suspect the banks may have acted unfairly by favouring high-frequency traders over institutional investors. Barclays, which this week announced a half-year pre-tax profit of £3.35 billion ($5.67 billion), down 7% on the same period last year, is already having its dark pool investigated.

Lloyds was fined £218m for manipulating benchmark interest rates, of which £70m was for meddling with the “repo” rate, used to calculate how much it should pay back to the Bank of England following a bail-out. The BoE described Lloyds’s behaviour as “highly reprehensible”.

Delayed gratification

The Bank of England also unveiled plans to delay the payment of bankers’ bonuses for up to seven years, to ensure that they have not been involved in serious misconduct. Regulators might be allowed to claw back bonuses up to ten years after they are paid. And senior bankers could find themselves legally liable if their firms fail through nefarious practices.

Two American property websites announced a merger. Zillow, the country’s most popular real-estate listings site, is buying Trulia, a rival, for $3.5 billion in a shares-only deal. Zillow says that both brands will continue to operate side-by-side.

Banco Espirito Santo lost €3.6 billion ($4.8 billion) in the first half of 2014, stoking fears for its health. The Portuguese bank replaced its management after its parent company sought protection from creditors.